Hello everyone, welcome to IDH's first quarter of 2026 results conference call. I'm pleased to be joined from IDH's side, Dr. Hend El Sherbini, Chief Executive Officer, Sherif El Zeiny, VP and Group CFO. The company, as usual, will start with the presentation and then we'll open the floor for Q&A. Dr. Hend, please go ahead.
Thank you, Ahmed, and good afternoon, everyone. I'm Dr. Hend El Sherbini, CEO of IDH. I'm pleased to report a strong start to 2026, with IDH delivering solid operational and financial performance despite the seasonal impact of Ramadan and Eid during the quarter. The results we are presenting today reflect the resilience of demand across our markets and the continued strength of our operating platform, supported by ongoing network expansion, deeper patient engagement, service diversification, and disciplined execution.
During the quarter, we continued to strengthen our leadership in Egypt, maintain stable progress in Jordan, built on the turnaround achieved in Nigeria, and advanced the ramp-up of our Saudi Arabian operations. We're also pleased with the group's ability to deliver healthy profitability while continuing to invest for future growth, particularly in radiology, specialized diagnostics, and our broader regional footprint.
Turning to our performance in more detail, IDH delivered 31% revenue growth year-on-year in Q1 2026, with revenues reaching EGP 2.1 billion. Growth was supported by both volume and value, with test volumes increasing 22% year-on-year to 10.4 million tests performed, and average revenue per test rising 7% to EGP 199. During the quarter, we served 2.2 million patients, reflecting year-on-year growth of 17%.
These trends also helped us further strengthen our average tests per patient metric, which reached 4.7 tests per encounter, compared with 4.5 in Q1 2025. This improvement reflects deeper patient engagement, stronger referral flows, and continued success in expanding cross-service utilization across our growing platform.
Ahmed, please go to next slide and the slide after.
In Egypt, momentum remained strong during the quarter, with revenues increasing 35% year-on-year to EGP 1.8 billion. Growth was supported by a 22% increase in tests performed and 10% rise in average revenue per test, reflecting continued strength in demand, pricing optimization, and improving diagnostic mix. Egypt remained the core engine of group performance, contributing 85% of total revenues in Q1 2026 and continuing to demonstrate scaled resilience and strong operating fundamentals.
Importantly, Egypt delivered this performance despite the seasonal impact associated with Ramadan and Eid, which included a greater number of holidays during the Q1 2026 compared with the prior year period. Next slide. The continued expansion of our physical network in Egypt remained a key driver of growth and accessibility. Over the past 12 months, we added 151 new branches in Egypt, bringing our national network to 751 locations at the end of March 2026.
These new sites continue to deepen our presence across Greater Cairo and regional cities, supporting stronger access for both contract and walk-in patients. Our home collection service also remained a key pillar to our Egyptian operations, accounting for approximately 23% of Egypt's revenue during the quarter. The service continues to benefit from strong patient adoption, enhanced digital booking capabilities, efficient logistics, and the strength of our nationwide network.
Next slide. Al Borg Scan continued to play an important role in our long-term strategy to build a more integrated diagnostics platform. During Q1 2026, radiology and radiotherapy revenues reached EGP 94 million, up 67% year-on-year, supported by increased utilization, higher patient traffic, and the contribution from Cairo Ray for radiotherapy. The integration of radiotherapy capabilities continues to strengthen our positioning in oncology diagnostics and expands our ability to serve patients and referring physicians across a wider range of specialized services.
During the quarter, profitability in this segment was temporarily impacted by pre-operating expenses related to a new Al Borg Scan branch. This reflects our continued investment in expanding our radiology footprint and building a stronger platform for future growth. We continue to expect radiology and radiotherapy to play an increasingly important role in our growth mix over the coming period. Next slide. In Saudi Arabia, our new geography continued to show strong progress during the quarter.
Biolab KSA generated SAR 2.2 million in revenues in Q1 2026, representing 171% year-over-year growth. In Egyptian pounds terms, revenues increased 175% to EGP 30 million. Growth was driven by a sharp increase in patient test volume, with patients served increasing 146% year-over-year and tests performed rising 163%. This momentum reflects growing brand awareness, stronger utilization across the existing branch network, and the continued ramp-up of operations following the expansion to three branches.
We remain focused on growing the business in a disciplined manner, with plans to launch three additional branches in the coming months and take the network to six locations. While the business remains in its early stages, the progress achieved so far continues to reaffirm our confidence in the long-term potential of Saudi Arabia as a key pillar in IDH regional growth strategy. Next slide. As always, profitability remained a core focus for us, and we are pleased to have delivered healthy profitability despite temporary pressure during the quarter.
Gross profit increased 28% year-on-year to EGP 807 million, while EBITDA increased 26% year-on-year to EGP 611 million. Gross profit margin remained largely stable to 38.9%, compared with 39.8% in Q1 2025, demonstrating the resilience of our operating model despite the seasonal impact of Ramadan and Eid. EBITDA margins recorded 29.5%, compared to 31.5% last year, reflecting pre-operating expenses related to a new Borg Scan branch and higher marketing and promotional spending in support of growth initiatives.
At the bottom line, net profit increased 78% year-on-year to EGP 437 million. Excluding foreign exchange gains in both periods, adjusted net profit increased 36% to EGP 292 million, with adjusted net profit margin improving to 14.1% from 13.5% last year. We were also pleased to see Nigeria maintain positive EBITDA generation during the quarter, with EBITDA margin improving to 13.9% from 7.7% last year, further confirming the progress of our turnaround strategy. As we look ahead, our priorities remain unchanged.
We continue to deepen our leadership in Egypt, expand our emerging specialized diagnostic platform, accelerate the disciplined ramp-up of Saudi Arabia, and build on the profitability improvements achieved in Nigeria. Across the group, we remain focused on operational efficiency, digitalization, procurement optimization, and enhancing the patient experience. At the same time, management continues to closely monitor evolving macroeconomic conditions and region developments, which may introduce volatility across parts of our footprint.
Overall, we believe IDH remains well-positioned to build on its strong start of the year and continue delivering sustainable long-term growth. With that, I'll hand the call over to Ahmed and Sherif, who will take you through key trends across our markets and a more detailed breakdown of our financial performance of the quarter. Thank you.
Thank you very much, Dr. Hend. Good afternoon, ladies and gentlemen. My name is Ahmed Refaat, and I'm IDH Head of Financial Planning and Analysis. I will discuss in more detail the main macroeconomic and geopolitical trends seen across our markets. During the first quarter of 2026, we continued to operate against a mixed but manageable macroeconomic backdrop across our markets. In Egypt, the operating environment continued to benefit from stabilization achieved during 2025, supported by improved foreign exchange availability and more predictable market conditions compared with prior periods.
That said, management continues to closely monitor renewed pressure on the Egyptian pound, especially in light of the recent regional development and the escalation of the U.S.-Israel conflict with Iran in early 2026. These developments may cause more ups and downs in regional markets and could affect foreign exchange rates and inflation. In Nigeria, operating conditions continued to show signs of gradual improvement, with pricing adjustment, currency movement, and a gradual recovery in patient activity, supporting continued progress at EchoLab.
Next slide, please. Over in Jordan and Saudi Arabia, the healthcare demand backdrop remains sustaining, although both markets continue to be exposed to wider regional geopolitical developments. Jordan continues to benefit from a stable insurance-led healthcare system, which supports consistent demand for diagnostics. During the quarter, Biolab test volume increased 10% year-on-year, supported by higher tests per patient and continued promotional and loyalty initiatives. Saudi Arabia continues to benefit from long-term healthcare sector transformation, rising private sector participation, and growing demand for high-quality diagnostics.
However, given the recent geopolitical development in the region, management continues to monitor potential implications for economic activities, patient volume, and consumer outlook across these markets. Next slide. Turning quickly to our latest Q1 result, Egypt delivered strong broad-based growth, with revenue rising 35% year-on-year, supported by both volume expansion and higher average revenue per test. Radiology and radiotherapy revenue in Egypt also performed strongly, increasing 67% year-on-year to EGP 94 million, reflecting continued growth in higher value specialized services.
Meanwhile, Jordan continued to deliver revenue growth in both local currency and Egyptian pound terms. Test volume increased 10% year-on-year, while patients served remained largely stable, reflecting higher tests per patient and the continued impact of Biolab's promotional cross-selling and loyalty initiatives. In Nigeria, EchoLab continued to build on the turnaround achieved last year, with revenues increasing 23% in local currency terms and EBITDA margin improving to 13.9%. In Saudi Arabia, the ramp-up continued at a strong pace, with revenues increasing 171% year-on-year in Saudi riyal terms, supported by a sharp increase in patient and test volume.
With the third branch now operational and additional locations planned over the coming months, we expect Saudi Arabia to remain an important growth driver for the group. Finally, in Sudan, operations remain significantly constrained by the ongoing conflict, with only one branch partially operational and no material change to report at this stage. I will now hand the call over to Sherif, who will provide a more detailed overview of our cost, profitability, and balance sheet position for the quarter.
Hello. Good afternoon, ladies and gentlemen, and thank you for your time today. As Ahmed mentioned, during my presentation, I will focus on both margins profitability and our working capital and liquidity position before we open the floor to our questions. During Q1 2026, profitability remained healthy despite seasonal and operational pressure during the quarter. Revenues increased 31% year-on-year, supported by strong volume growth across the group, while gross profit increased 28% to EGP 807 million.
Group gross profit margin remained largely stable at 38.9%, compared with 39.8% in the prior year quarter. Margin performance reflected the seasonal impact of Ramadan and Eid, with a greater number of holiday days falling within Q1 2026 compared with Q1 2025, resulting in a temporary operating deleverage across part of the network. Margins were also impacted by pre-operating expenses related to a new Al Borg Scan branch, as well as continued investment in operational capacity to support branch expansion.
On the cost side, raw materials improved as a share of revenue, declining to 18.7% from 19.5% last year, reflecting continued procurement optimization, improved inventory planning, and supplier negotiations. Direct wages and salaries increased to 21.2% of revenue from 20.1%, reflecting continued investments in branch expansion, newer geographics, and staffing requirements for recently launched facilities. Depreciation and amortization declined to 6.9% of revenue from 7.8%, supported by stronger revenue generation and better cost discipline across the group. On the SG&A front, expenses amounted to EGP 350 million in Q1 2026, up 32% year-on-year.
As a percentage of consolidation revenue, SG&A stood broadly stable at 16.9%, compared with 16.8% in Q1 2025. The increase in SG&A mainly driven by wage and salaries, which rose 24% year-on-year to EGP 152 million , reflecting annual salary adjustments, selective headcount additions, and Forex translation effect on Jordanian and Saudi payroll costs. Advertising and marketing expenses also increased 54% year-on-year to EGP 66 million as we continued investing in brand visibility, patient acquisition, campaigns, and promotional initiatives.
These investments were particularly important in supporting the continued ramp-up of Biolab KSA, while also reinforcing patient acquisitions and service awareness across key markets. Despite these investments, SG&A as a share of revenue remained broadly stable, reflecting continued discipline and scalability of the group platform. At the bottom line, net profit increased 78% year-on-year to EGP 437 million , with net profit margin expanding to 21.1% from 15.5% last year.
This strong bottom line performance was supported by foreign exchange gains of EGP 145 million during the quarter, compared with EGP 31 million in Q1 2025. These gains primarily related to the revaluation of foreign currency denominated intercompany balances. Excluding foreign exchange gains in both periods, adjusted net profit increased 36% year-on-year to EGP 292 million, with adjusted net profit margin improving to 14.1% from 13.5%.
It is also worth highlighting that operating profit increased 25% year-on-year to EGP 458 million, reflecting continued strength in group's underlying operating performance. As always, we maintain disciplined approach to liquidity and working capital management while supporting growth across the business. Net trade receivables stood at EGP 1.1 billion as March 31st, 2026, compared to EGP 996 million at year-end 2025. While days on hand stood at 126 days compared to 122 days at the end of 2025.
Inventory stood at EGP 666 million at March 31st, 2026, compared with EGP 424 million at year-end 2025. Days inventory outstanding reached 130 days versus 94 days at December 31st, 2025. This increase reflects the deliberate inventory build-up strategy implemented by management to secure the availability of critical medical supplies and test kits amid heightened regional tensions and ongoing uncertainty surrounding global supply chains and logistics routes. Cash balances and financial assets at amortized cost reached EGP 2.3 billion as at March 31st, 2026, compared with EGP 2.1 billion at year-end 2025.
IDH net cash balance increased to EGP 728 million as at March 31st, 2026, compared with EGP 472 million at year-end 2025, reflecting a strong operating cash generation and continued balance sheet strengths. Interest-bearing debt, including accrued interest, stood at EGP 422 million at quarter end, broadly stable compared with EGP 432 million at year-end 2025. Thank you for your attention, and we now welcome any questions you might have. Thank you very much.
Thank you very much to all participants on the call. If you wish to ask questions, you can either send them through the chat or you can use the raise hand function. Right. First question we received is if you can provide us with the usual guidance targets you provide, so such as revenue, EBITDA margin, CapEx. That's number one. Number two, for the planned expansions in Saudi, how much would those translate into revenue this year? Next year, how many branches do you intend to add as well?
Okay, Ahmed. The KSA revenue will be SAR 18 million for the year budget. Our budget for 2026 will be around EGP 10 billion with margins of 43% for gross profit and around 30% for the EBITDA.
Understood. There is one question as well is on the magnitude of price increases that you did at the beginning of this year. Do you anticipate with the current volatility that you would require to do further price increases, or what you've done so far is sufficient until now?
We will reach 10 branches for the first question. We will reach 10 branches for the KSA by the end of this year. For the second question you were asking about, please? Price increase?
Yes. The price increase, the magnitude that you've done at the beginning of this year. This magnitude, does it fully cover the volatility that has happened so far or not? If not, are you considering doing another round of price increases or not?
Okay. Our price increase was increased by 7% for Q1.
We have increased 7% overall, and we maintain the flexibility to increase the prices if anything happens regarding the depreciation of the Egyptian pound or anything that we need to do in terms of price increase. We still have the flexibility to do it during the year.
Understood. Second is on the geopolitical tensions that have happened. Has it reflected in any cost inflation when it comes to raw material prices? What's the current inventory cover that you have?
We already covered our inventory till August for this geopolitical event. We already obtained it with the average price, the current price, not by the increased price. We are covered till August or beginning of September.
Understood. There are two more questions. Again, a reminder to everyone on the call, if you wish to ask questions, you can either send them through the chat or use the raise hand function. The first one is, can you help us with the effective tax rate? It has somewhat been lower than your average annual rate. Is there seasonality in it that we would go back to the full year at the 33%, 35% that you typically do, or the first quarter effective rate that's current is more or less the ongoing rate that we have? That's point number one. Sorry, go ahead.
No, okay. After excluding the FX gain , we will have 35% tax effective rate, which is a normal tax effective rate of IDH for the previous years.
That answers the question, yeah. Thanks. Second is on any changes recently in the competitive landscape. Have you seen any of your main competitors either expanding aggressively or others maybe slowing down their expansions, having some closures. Maybe some have done price increases that are significantly higher or lower than what you've done and therefore would create any direct competition for you.
We haven't seen any difference in the competitive landscape. We've seen some of the providers decrease their footprint or even disappear, but we haven't seen any remarkable activity from any of the competitors.
Understood. Fouad Abi Shaheen is asking two questions. I'll take them one by one. Can you elaborate on the rationale for not buying shares despite having that technically approved for quite a while?
We haven't contemplating buying shares because of the lack of liquidity. We don't want to add to the problem of the lack of liquidity by buying more shares. This was the main reason.
Understood. His second question is, could you elaborate on the reasons for the slower branch rollout in KSA versus initial plans, and are there any key learnings on that market that you would highlight?
We are in the learning phase in Saudi Arabia, so we try to minimize the losses there, and we try to understand the market so that when we expand, we expand with profitability rather than just opening branches and losing on the net profit and the EBITDA margin.
Understood. Zoher has two questions. How much do you expect the higher cost of inventory to be post August 2026? Given the current prices, we don't have to bake in volatility assumptions into it. The second question he has is what is the branch expansion target for Egypt in 2026, i.e., the closing branch figure for Egypt as of this year?
Regarding the inventory, we already purchased by EGP 47 per U.S. dollars, which is lower than the actual budget of EGP 50. After August, we are planning we will range around EGP 50, which is still.
Yes.
...both of them will be less than the budget of EGP 50. Regarding the branches, we are aiming to open 249 branches in 2026. In Egypt, yes, noting that most of them will be hospitals and clinics.
Understood. Marina is asking, are there any plans for a change to the current dividend policy?
No.
No. All right. This is a final reminder, please, to everyone because we haven't received any questions. If you wish to ask questions, please send them through the chat or use the raise hand function. Zoher is: how does the test per branch and the economics of a hospital clinic compare to other branches?
In terms of the hospital management, we give a revenue share. We do a revenue share with the hospitals, and this is how we operate. Then we have, as a normal branch, we have walk-in and corporate patients.
All right. Fouad is asking what investment opportunities are you assessing, as this was one of the reasons highlighted for maintaining such a high cash balance.
There are multiple opportunities that we look at now. However, we're not ready to share all the information because we haven't got any board approval on any of them. We are looking at many opportunities for the time being.
Understood. Marina is asking, could you elaborate on the current conditions in Jordan, given the proximity to the conflict? Have you seen volume declines post-quarter end? How is the health of the consumer and what is the current restrictions on price increases?
In Jordan, it is quite stable. We have an increase in the number of tests by 10% versus last year. Biolab has a very good position in the Jordanian market, and we haven't seen any problem regarding the operations there. We have seen, as I said, 10% increase in tests and 1% decrease in the visits. However, overall, we've seen the growth. Also, this is given that this quarter there is Ramadan and Eid, there is a seasonal decrease if you compare to last year.
Right. Zoher is asking: How has the business changed since the new shareholder, Elliott, came in last year? Are there any new initiatives you can update us on?
We haven't seen any changes since Elliott acquired the Actis shares. They haven't done anything yet.
All right. Where should we expect EBITDA margins to trend towards in the medium term?
Early thirties. We will see early thirties as we are right now.
Understood. Let me just check quickly that we haven't received anything else. Yeah, we haven't received any further questions. I'm not sure if you have concluding remarks, otherwise, I can do that.
No, nothing, Ahmed. Thank you.
All right. Thank you very much to IDH's management and to everyone. Have a good rest of the day, everyone. This concludes today's earnings call.
Thank you very much. Thank you.
Thank you.